AirAsia launches four new domestic routes in time for festive season

India Air traffic sees sequential growth of 5-6% in December 2021: ICRA

The average daily departures were at ~2,800 notably higher compared to ~2,065 in December 2020, and ~2,700 in November 2021; the average number of passengers per flight during December 2021 was largely flat at 129 vis-à-vis 130 in November 2021

Elevated aviation turbine fuel (ATF) prices along with rising fresh infections likely to delay recovery process in Q4 FY2022

New Delhi, India: Domestic air passenger traffic grew by ~5-6% at ~111 lakh in December 2021, compared to ~105 lakh in November 2021. The same reflects a Y-o-Y growth of ~52%, wherein passenger traffic stood at ~73 lakh in December 2020. The airlines’ capacity deployment for December 2021 was around 35% higher than December 2020 (86,465 departures in December 2021 against 64,002 departures in December 2020). On a sequential basis, the number of departures in December 2021 was higher by ~7%, as Covid-19 infections demonstrated a downward trajectory.

Commenting further, Mr. Suprio Banerjee, Vice President & Sector Head, ICRA Limited said, “For December 2021, the average daily departures were at ~2,800, notably higher than the average daily departures of ~2,065 in December 2020, and somewhat higher than ~2,700 in November 2021. The average number of passengers per flight during December 2021 was close to ~129, which was largely flat compared to November 2021. Though sequential recovery continued in December 2021, largely driven by leisure travel, boosted by calendar year-end festive and holiday travel, demand continues to remain subdued from the corporate traveller segment, as reflected by the passenger traffic for 9M FY2022 remaining ~44% lower than 9M FY2020. Moreover, with the emergence of the new Covid variant and the recent trend of rising infections, few states have already started announcing certain curbs on domestic air travel, posing a serious threat to domestic passenger traffic recovery in the near term.”

With effect from October 18, 2021, the Ministry of Civil Aviation (MoCA) has allowed the restoration of the permitted capacity to 100% for domestic operations. It may be recalled that the MoCA had reduced the permissible capacity deployment to 50% of pre-Covid levels, with effect from June 01, 2021, due to the resurgence of the second wave of the pandemic. It had subsequently increased the permitted capacity to 72.5%, with effect from August 12, 2021, increasing the capacity further to 85%, with effect from September 18, 2021.

As for the scheduled international operations, which remains suspended since the start of the pandemic, as per the last directive dated December 9, 2021, of the Director-General of Civil Aviation (DGCA), the suspension is extended till January 31, 2022, given the threat of the recent emergence of a new variant of Covid-19. While the scheduled international operations are yet to start, the MoCA has permitted international operations under the Vande Bharat Mission (VBM) and the Air Transport Bubbles (ATB). Under the VBM for evacuation of Indian citizens from foreign countries, which started from May 07, 2020, international passenger traffic (inbound and outbound) for Indian carriers stood at ~64 lakh for the period May 07, 2020, to December 31, 2021. For December 2021, international passenger traffic for Indian carriers under the VBM has been estimated at ~6.85 lakh, a sequential growth of ~13%.

One major concern that continues to be a drag on the aviation sector is the aviation turbine fuel (ATF) prices, which have seen a sharp increase of 49% on a Y-o-Y basis till January 2022. It is mainly attributed to increasing in crude oil prices. This, coupled with relatively low capacity utilisation of aircraft fleet, will continue to weigh on the financial performance of Indian carriers in FY2022. Furthermore, the credit profile of most Indian carriers continues to be characterised by a weak liquidity position.

Leave a Reply

Your email address will not be published. Required fields are marked *